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Question;1.;Which of the following is considered a hybrid organizational form?;Limited;liability partnership;Partnership;Corporation;Sole;proprietorship;2. Which;of the following is a principal within the agency relationship?;A;shareholder;A;company engineer;The;board of directors;The;CEO of the firm;3. Which;of the following presents a summary of the changes in a firm?s balance sheet;from the beginning of an accounting period to the end of that accounting;period?;The;statement of cash flows.;The;statement of retained earnings.;The;statement of working capital.;The;statement of net worth;4. Teakap;Inc., has current assets of $ 1,456,312 and total assets of $4,812,369 for the;year ending September 30, 2006. It also has current liabilities of $1,041,012;common equity of $1,500,000, and retained earnings of $1,468,347. How much;long-term debt does the firm have?;$2,303,010;$2,123,612;$803,010;$1,844,022;5. Gateway;Corp. has an inventory turnover ratio of 5.6. What is the firm's days's sales;in inventory?;64.3;days;57.9;days;65.2;days;61.7;days;6. Your;firm has an equity multiplier of 2.47. What is its debt-to-equity ratio?;0.60;1.74;0;1.47;7.;Which of the following is not a method of ?benchmarking??;Utilize;the DuPont system to analyze a firm?s performance.;Identify;a group of firms that compete with the company being analyzed.;Conduct;an industry group analysis;Evaluating;a single firm?s performance over time.;8. Jack;Robbins is saving for a new car. He needs to have $ 21,000 for the car in three;years. How much will he have to invest today in an account paying 8 percent;annually to achieve his target? (Round to nearest dollar.);$22,680;$26,454;$16,670;$19,444;9.;Ferris, Inc., has borrowed from their bank at a rate of 8 percent and will;repay the loan with interest over the next five years. Their scheduled;payments, starting at the end of the year are as follows?$450,000, $560,000;$750,000, $875,000, and $1,000,000. What is the present value of these;payments? (Round to the nearest dollar.);$2,615,432;$2,431,224;$2,815,885;$2,735,200;10.;Ajax Corp. is expecting the following cash flows?$79,000, $112,000, $164,000;$84,000, and $242,000?over the next five years. If the company's opportunity;cost is 15 percent, what is the present value of these cash flows? (Round to;the nearest dollar.);$429,560;$477,235;$414,322;$480,906;11.;Jayadev Athreya has started on his first job. He plans to start saving for;retirement early. He will invest $5,000 at the end of each year for the next 45;years in a fund that will earn a return of 10 percent. How much will Jayadev;have at the end of 45 years? (Round to the nearest dollar.);$2,667,904;$3,594,524;$1,745,600;$5,233,442;12.;Serox stock was selling for $20 two years ago. The stock sold for $25 one year;ago, and it is currently selling for $28. Serox pays a $1.10 dividend per year.;What was the rate of return for owning Serox in the most recent year? (Round to;the nearest percent.);16%;32%;40%;12%;13.;Regatta, Inc., has six-year bonds outstanding that pay a 8.25 percent coupon;rate. Investors buying the bond today can expect to earn a yield to maturity of;6.875 percent. What should the company's bonds be priced at today? Assume;annual coupon payments. (Round to the nearest dollar.);$923;$972;$1,066;$1,014;14.;Next year Jenkins Traders will pay a dividend of $3.00. It expects to increase;its dividend by $0.25 in each of the following three years. If their required;rate of return is 14 percent, what is the present value of their dividends over;the next four years?;$9.72;$12.50;$11.63;$13.50;15.;TuleTime Comics is considering a new show that will generate annual cash flows;of $100,000 into the infinite future. If the initial outlay for such a;production is $1,500,000 and the appropriate discount rate is 6 percent for the;cash flows, then what is the profitability index for the project?;1.11;0.90;1.90;0.11;16.;What decision criteria should managers use in selecting projects when there is;not enough capital to invest in all available positive NPV projects?;the internal rate of return;the discounted payback;the;modified internal rate of return;the profitability index;17.;The WACC for a firm is 13.00 percent. You know that the firm's cost of debt;capital is 10 percent and the cost of equity capital is 20%. What proportion of;the firm is financed with debt?;30%;70%;33%;50%;18.;If a company's weighted average cost of capital is less than the required;return on equity, then the firm;is financed with more than 50% debt;is perceived to be safe;has debt in its capital structure;partnership;19.;Gangland Water Guns, Inc., is expected to pay a dividend of $2.10 one year from;today. If the firm's growth in dividends is expected to remain at a flat 3;percent forever, then what is the cost of equity capital for Gangland if the;price of its common shares is currently $17.50?;15.00%;12.00%;15.36%;14.65%;20.;A firm's capital structure is the mix of financial securities used to finance;its activities and can include all of the following except;stock.;bonds.;equity options.;preferred stock.;21.;Dynamo Corp. produces annual cash flows of $150 and is expected to exist;forever. The company is currently financed with 75 percent equity and 25;percent debt. Your analysis tells you that the appropriate discount rates are;10 percent for the cash flows, and 7 percent for the debt. You currently own 10;percent of the stock.;If;Dynamo wishes to change its capital structure from 75 percent to 60 percent;equity and use the debt proceeds to pay a special dividend to shareholders, how;much debt should they issue?;$600;$225;$321;$375;22.;Turnbull Corp. had an EBIT of $247 million in the last fiscal year. Its;depreciation and amortization expenses amounted to $84 million. The firm has;135 million shares outstanding and a share price of $12.80. A competing firm;that is very similar to Turnbull has an enterprise value/EBITDA multiple of;5.40.;What;is the enterprise value of Turnbull Corp.? Round to the nearest million;dollars.;$1,315;million;$1,334;million;$1,787;million;$453.6;million;23.;Jockey Company has total assets worth $4,417,665. At year-end it will have net;income of $2,771,342 and pay out 60 percent as dividends. If the firm wants no;external financing, what is the growth rate it can support?;30.3%;27.3%;32.9%;25.1%;24.;Which of the following cannot be engaged in managing the business?;a sole proprietor;a general partner;a limited partner;none of these;25.;Which of the following does maximizing shareholder wealth not usually account;for?;Government regulation.;Risk.;The timing of cash flows.;Amount of Cash flows.;26.;The strategic plan does NOT identify;working capital strategies.;the lines of business a firm will compete;in.;major areas of investment in real assets.;future mergers, alliances, and;divestitures.;27.;Firms that achieve higher growth rates without seeking external financing;none of these.;have a low plowback ratio.;have less equity and/or are able to;generate high net income leading to a high ROE.;are highly leveraged.;28.;Drekker, Inc., has revenues of $312,766, costs of $220,222, interest payment of;$31,477, and a tax rate of 34 percent. It paid dividends of $34,125 to;shareholders. Find the firm's dividend payout ratio and retention ratio.;85%, 15%;45%, 55%;15%, 85%;55%, 45%;29.;The cash conversion cycle;begins when the firm uses its cash to;purchase raw materials and ends when the firm collects cash payments on its;credit sales.;estimates how long it takes on average for;the firm to collect its outstanding accounts receivable balance.;shows how long the firm keeps its;inventory before selling it.;begins;when the firm invests cash to purchase the raw materials that would be used to;produce the goods that the firm manufactures.;30.;You are provided the following working capital information for the Ridge;Company;Ridge Company;Account;$;Inventory;$12,890;Accounts;receivable;12,800;Accounts;payable;12,670;Net;sales;$124,589;Cost;of goods sold;99,630;Cash;conversion cycle;What is the cash conversion cycle for Ridge Company?;129.9 days;46.4 days;83.5 days;38.3 days


Paper#47441 | Written in 18-Jul-2015

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